Evaluating the Technical Feasibility
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Next, they evaluated the technical feasibility: How easily could they integrate their back-end Web services with Outlook? Then they considered the business implications, which included defining the target customer base and market potential. Once Zanca's team identified the opportunity, they turned the project over to a development team to build a prototype.
That team then developed a concept for QuickShip, which Zanca and his business counterparts evaluated. They looked for a few key elements: Does it work technically? Check. Is there market value? Check. Does it truly innovate? Check.
At that point, the project moved to a full-fledged product team, which transformed the prototype into a marketable product.
In February, Zanca unveiled QuickShip at the 2008 Microsoft Office System Developer Conference. FedEx sells the technology to customers, particularly small and midsize businesses. The innovation team took the product a step further, creating a similar application--Mobi--that works on mobile devices like the iPhone and BlackBerry.
Another source of innovation is the FedEx Labs. The facility, which opened in October 2006 in Memphis' warehouse district, houses entrepreneurs from the area and serves as an incubator for pioneering ideas.
Employees from various divisions within the company work in rotation at the Labs, where they've developed products such as laser "dimensioners," three-dimensional printing and high-speed scanning capabilities.
Carter says the company has seen hundreds of millions of dollars in benefits from their innovations, but adds that there is a balancing act between the two ends of FedEx's innovation spectrum. For Zanca's team, there are more clearly defined rules about what they can do in terms of experimentation than there are in the Labs. Zanca's team plays with Internet technologies--which have certain limitations around things like security, scalability and reliability-- while the Lab workers often start from scratch, building new tools with fewer technical boundaries.
Carter uses an old sports metaphor to describe how the teams move forward. "Anyone who would say that football isn't an innovative space doesn't follow the sport," he says. "There are all kinds of innovations that don't break the rules or extend the sidelines. They're just different ways of more effectively beating your competitors."
You won't find FedEx's innovation-driven culture at most companies. McKinsey's research points to one obstacle to innovation: While a vast majority of corporate executives say innovation is one of their top three priorities for boosting growth, the lack of coherent governance practices tends to curtail their efforts.
When surveyed last fall about the ways in which their company oversees innovation practices, more executives (36 percent) pointed to an ad hoc approach than to any other. Still, 34 percent said governing innovation is part of their regular agenda, but only one in 10 said there's a corporate innovation group or leadership team devoted to overseeing their practices.
Along the same lines, an Accenture study released in April found that just over one-fifth of 601 global senior business executives said their organizations have a defined person overseeing innovation. About half that number said that a C-level executive oversees the function.